Nepal Liquors : In High Spirits

This top liquor manufacturer of Nepal is moving ahead carrying the four decades legacy of United Spirits Nepal Pvt. Ltd.

Rajesh Bir Singh Tuladhar
Executive Chairman
Nepal Liquors Pvt Ltd

In 2015, Rajesh Bir Singh Tuladhar, executive chairman of Nepal Liquors Pvt Ltd, was going through a wide range of emotions. “We were nervous, excited and hopeful at the same time while bidding for the acquisition of United Spirits Nepal Pvt Ltd (USNPL).

There was tough competition as there were other bidders as well. Eventually, we were successful in the bid for acquisition of its entire stake. Nothing could make us happier than that!” recalls Tuladhar. After its acquisition in 2018, USNPL changed its name to Nepal Liquors Pvt Ltd. USNPL was a subsidiary of the Indian liquors giant United Spirits Limited (USL), which in turn is a subsidiary of Diageo Plc. USL had 82.46 percent share in USNPL. Diageo decided to get out of Nepal and it announced to sell its entire stake in USNPL to successful bidders. Tuladhar was already a shareholder of UNSPL.

After the acquisition by Tuladhar, the company entered into a licensing arrangement with USL. Nepal Liquors Pvt Ltd received the legal license as a franchise to manufacture and market the brands of USL in the country. This move was a part of USL’s strategy to sell off non-core assets, shares Tuladhar.

Nepal Liquors Pvt Ltd is part of a family-run business, which was being handled by Late Bhakta Bir Singh Tuladhar, father of Rajesh Bir Singh Tuladhar.

After acquiring the Indian company’s entire stake in UNSPL, Tuladhar and his family hold majority shares in Nepal Liquors Pvt Ltd.

“We have four decades of experience in the liquor business in association with United Spirits Limited. Coming to this day, we have been successful in gaining a good reputation for doing business ethically. Nepal government has awarded us with the certificate of Commercially Important Person (CIP) for being a high taxpayer in Nepal during our association with USL” shares Tuladhar.

After Acquisition
“Only the name of United Spirits Nepal has been changed to Nepal Liquors. Its marketing strategies, plans and products, which have been on the market for the past four decades, remain the same. However, we are more focused on increasing the market share because now we are responsible for all the expenses, marketing plans and strategies in a more professional way,” shares Tuladhar, adding, “Though USL offloaded its share, we share an exclusive and mutually beneficial relationship based on trust and respect with them today as well. They are helping in our market study and analysis of our market presence.” According to him, at present around 150 employees are directly engaged in the company while around 80 people are indirectly associated with the company.

Market Presence
Nepal Liquors Pvt Ltd is still the number one company in the whisky segment. Its factory in Biratnagar manufactures and distributes alcoholic beverages across the country. It has altogether eight regional distributors and 70 sub-distributors. “We are one of the leading brands in the liquor market of Nepal.

We have around 45 to 50 percent market share. Our annual turnover of the last FY2017/18 reached more than Rs 3 billion. We aim to make it more than Rs 5 billion in the near future. We focus on sustaining the brand rather than sustaining volume,” says Tuladhar.

The company also has good relations and understanding with Diageo Plc. “Through USL, we are a franchise of Diageo Plc which has more than 1,000 products.We are quite happy about it. Working with such a multinational company enables us to open the door for launching many new products in the coming days.” Diageo Plc does not have its own factory. Its focus is marketing through franchises.

Signature, Antiquity Blue, McDowell’s areSignature, Antiquity Blue, McDowell’s is some of the popular brands in the domestic market. “Recently we launched Royal Challenge in April.

We are doing better in the whisky segment. But each product has its own portfolio. So we emphasize each product of ours.”

Each product has its own life cycle. The company has been maintaining the taste and quality of its products. It has been introducing the same product in different ways in the market. According to the company, until date it has changed Signature’s packaging and labelling three times. It has changed the labels and bottles of Scotch as well. Tuladhar mentions, “We are providing freshness and a new taste to our customers in the products. This is actually a challenge for us. Our team studies before designing the products. We make the final decision to launch a product with the finest look and best quality.”

“|Blending of the products is also done in its own factory. There is an audit of every batch of the products. Throughout the year, it conducts testing of certain parameters of each batch. When the lab approves the parameter of the batch then only the company produces the products,” he says.

Competition
The company has witnessed many ups and downs in its journey. There were only a few liquor products in Nepal three decades ago. “But today, there are many emerging liquor companies in Nepal. So, there is obvious competition. However, we have been managing the competition quite well excelling in our performance,” expresses Tuladhar.

“We have decades of experience, qualified professionals, quality products and above all best professional and ethical practices in our company that help us to face the competition. We have good recognition in the market. We have good support from the government as well. Diageo Plc is a plus point for us.”

Challenges
Overcoming brand duplication is the biggest challenge for the company. To combat this, the company keeps on lobbying with the government against duplication. “The company is tackling this problem by deploying our surveillance team in the market. We investigate in the market. Going in-depth is very tough.Instead, we boost our original products, maintain quality and change the packaging and labelling,” mentions Tuladhar. “Today’s customers are also aware of duplication. We file reports with the government authorities concerned when we come across any case of duplication,” he adds.

Taxation
Every year, the government increases the tax on production and import of liquor. The company is one of the big taxpayers in the country. Tuladhar says, “It is because we don’t compromise in paying taxes. We have been and shall be paying taxes in a very transparent way.”

Expansion Plans
The company is working to launch new products in the domestic market. It is also focusing on the growth of market share, strengthening the quality of its products and expanding the product portfolio. “Customers are satisfied with our products. They are the basis for us. So, we keep on boosting quality products. We are also planning to increase the production capacity,” shares Tuladhar.

CSR
For Nepal Liquors, CSR is another prime aspect after the products’ quality. The company frequently sponsors many sports activities in the country. “We are tying up with the “A” division football team. We have organised the Prime Minister’s Cup as well for the promotion of cricket in the country,” says Tuladhar

The company believes that each company has to invest in CSR not for popularity but for contributing to society. “We have been contributing a lot through our CSR activities since the time of my late father. Diageo is the sponsor of the IPL team Royal Challengers Bangalore (RCB).

RCB has its own RC Club. We in Nepal too we will be trying to focus on linking with Nepali cricket,” notes Tuladhar.

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